The Karnataka High Court on Friday ordered a stay on the Competition Commission of India’s (CCI) probe into violation of competition laws by e-commerce giants Amazon and Flipkart.
The court has asked the respondents in the matter including CCI and Confederation of All India Traders (CAIT) to file their responses within eight weeks.
The High Court was of the view that the ongoing investigation by the Enforcement Directorate (ED) should be first be completed. Last year, the ED initiated insvestigation against both Amazon and Flipkart for alleged violation of the foreign exchange law.
Amazon had on Monday filed a writ petition in the Karnataka High Court seeking stay on the CCI probe order into its alleged violations of the competition laws. The anti-trust body had in January had ordered an enquiry into the operations of both Amazon and Flipkart on multiple counts, including deep discounts and exclusive tie-ups with preferred sellers.
In its plea, Amazon had sought “quashing and setting aside” of the CCI’s probe order dated January 13, 2020, claiming that the fair competition watchdog passed orders against the company without applying mind and caused serious loss to its reputation.
Amazon had pleaded for an interim stay on the proceedings as the balance of convenience for stay lies in favour of the petitioner as a bonafide company.
In its order, the CCI had said that it needs to be investigated whether the alleged exclusive arrangements, deep discounting and preferential listing by Amazon and Flipkart are being used as an exclusionary tactic to foreclose competition. Also, it needs to be seen if such practices are resulting in an appreciable adverse effect on competition, contravening the provisions of Section 3(1) read with Section 3(4) of the Competition Act.
“In view of the foregoing, the Commission is of the opinion that there exists a prima facie case which requires an investigation by the Director General (DG), to determine whether the conduct of the OPs (Amazon and Flipkart) have resulted in contravention of the provisions of Section 3(1) of the Act read with Section 3(4) thereof, as detailed in this order,” the CCI’s January order said.